The latest figures from the Australian Bureau of Statistics confirm that real wages are falling at the fastest rate since the Great Depression, possibly even the 1890s, both period of massive unemployment.
Wages are up by 3.1 percent in the past year—but prices rose by 7.3 percent, meaning that real wages have fallen by more than 4 percentage points. This is at a minimum. Price increases on most essential goods and services are rising by more than 8 percent, eating even faster into household budgets.
This is not just a freak result. Real wages have been sliding throughout the pandemic. Since March 2020, inflation-adjusted wages have fallen in Victoria by 5.1 percent, in NSW by 5.8 percent and in Queensland by 7.4 percent. This comes on top of years of wage stagnation since the election of the Abbott government in 2013
This situation is disastrous. It is also completely avoidable. At a time when the bosses have been screaming about labour shortages, with high vacancy rates and unemployment at 50-year lows, our unions should be taking full advantage of workers’ relatively strong bargaining position to score big wage increases.
The bosses could be forced to pay up. In the private sector, in areas such as finance and insurance or real estate, where workers are mostly employed on individual agreements, bosses have been jacking up wages and granting sign-on or retention bonuses amounting to a 4.4 percent increase over twelve months, up from 2.9 percent the previous year. But in the public sector, where teachers and health workers are more likely to be on collective union agreements, the increase was just 2.4 percent, no different from a year ago.
There is no sign that public sector workers on union agreements will do any better in the next year or two, because many are locked into collective agreements that incorporate wage increases of just 2 to 3 percent for the full three years of the agreement. Workers in education, one of the more unionised areas of the workforce, are actually experiencing the lowest wage rises out of any—just 2.2 percent—as state governments and university vice-chancellors tighten the screws and meet little resistance from unions. Union agreements are now a drag on workers’ wages, a scandalous situation.
The Labor Party has been no friend of the workers. More often than not it’s been state Labor governments that have imposed wage cuts on teachers, public servants and health workers.
Unless workers and unions begin to resist, the situation is only going to get worse. The Albanese government was elected in part on a promise to raise wages and bring electricity bills under control. It is now doing the opposite. Ministers tell us that we must accept wage reductions for at least the next two years to bring inflation under control, despite the fact that wages have had little to do with soaring prices.
Together with the Reserve Bank, the Albanese government is trying to slow the economy to create more unemployment to hold down wages even more. Interest repayments on mortgages and credit card debt, rising at the fastest rate for decades, are also bearing down on workers.
Labor’s new, misleadingly named Secure Jobs, Better Pay Bill, which it and the ACTU tout as a way to lift wages, may only make things worse by giving the Fair Work Commission even more powers to order unions to end strikes.
Rising unemployment will give the bosses more ability to pick and choose workers, reducing the pressure to offer wage hikes to attract staff.
While workers are getting screwed, the bosses are still raking it in: profits were up by 28 percent in the June quarter, and are now well above their long-term average.